Wendy Leung's Seattle Condo Blog

Cosmopolitan's Views Under Attack (again)?

Looks like the Cosmopolitan, which suffered from a loss of views by a taller project a couple of years ago, may be affected yet again by another construction project.  The Department of Planning and Development recently approved a proposed 400 foot tower in the Denny Triangle. The new project, designed by Weber Thompson will be on the corner of Lenora St and 8th Ave (2030 8th Ave). The current site is a two story commercial building while the proposed new structure calls for a 39 story high rise with 350 apartment units. Read more here.

There are several high rise condos located within a two blocks radius of the new project: Cosmopolitan, 2200 Westlake and Enso. If the giant building goes up, it will probably have the biggest impact on Cosmopolitan.  A couple of years ago, soon after Cosmopolitan was built, it had an office project going up on its western side. The plan initially called for a lower building (13 stories) with smaller impact on the Cosmo but the plan was later on revised to go much higher (33 stories). After the completion of that project, the new height affected Cosmopolitan residences living on the higher western floors.  

This latest new proposed project is probably something Cosmo residences won't be looking forward to either.  According to the spoke person representing the new project's owners, there is no plan to start construction yet. The building permit is good for 6 years. So, we might not see this new building coming up for a while (or at all) but it's worth keeping an eye on.

Related posts:

Cosmopolitan View
Cosmopolitan
2200 Westlake
Enso Update

2011 Predictions for Seattle's Condo Market

Have we hit bottom in the Seattle condo market?  My expectation is things will be flat to ever so slightly up this year from a pricing point of view and up materially from a volume point of view.

What do you think?

 

Getting some broader perspective on the Seattle market

Even the most bullish Seattle real estate watchers will agree that the market has slowed dramatically versus a few years ago when sellers were reviewing multiple offers, comparing escalation clauses, and essentially selling property sometimes in a matter of a few short weeks.

But it's also easy to forget how things are going in Seattle relative to the rest of the country. Regardless of whether you're expecting the market to go up, stay the same, dip, or crash -- one thing that's hard to dispute is that at least so far, Seattle has been holding up really well compared to the rest of the country.

Of course, it's possible Seattle is just about to experience more of what our neighbors in other states' have been through for a year or so; on the other hand, the longer Seattle muddles through this, the less likely we'll see the magnitude of impact seen elsewhere (e.g. 20-30% price drops).

In fact, Business Week recently named Seattle one of the fastest selling housing markets in the nation (#9 to be exact).

The Seattle area is home not only to some of the world's most famous companies, including Microsoft and Starbucks, but also to the Space Needle and Mt. Rainier. The real estate market has slowed in Seattle but hasn't declined as much as in other major cities.

Seattle Condo Market Update

The April numbers are in and there's good news and bad news.  Let's start with the bad news.

• For the first time in a long time, median prices in Belltown dropped.  If you remember my last update in March, we saw median prices rise over 13% versus March 2007.  In April, we saw median prices drop by 7%.  We'll have to see how the next few months play out to determine if this is the adjustment we've all been waiting for so that buyers on the sidelines can come back in or if prices drop further.

The good news:

• April over Apil inventory (April 2008 as a proportion of April 2007 inventory) has come down compared to March over March numbers.  In March, Belltown inventory was 51% higher than March of 2007.  In April, Belltown inventory was 41% higher than April of 2007.  If this trend continues, it would suggest that there while we are certainly seeing more units on the market than last year, there does appear to be a ceiling in terms of how much more supply is entering the market and as a result (all else equal), we will have a floor on how low prices will ultimately go. 

The Standoff Continues as Sellers Refuse to Roll

Here's a good article in the Seattle Times describing "sticky pricing" and the fact that Seattle sellers are largely refusing to make giant price reductions -- even as most buyers refuse to pay 2007 prices. 

As most SCR readers know, I happen to believe that we are more likely to be in a balanced market by the end of this year than an all-out buyers' market.  In fact, it seems to me that the biggest factor will be if the rest of the country's economic jitters drag Seattle down since the local fundamentals (job growth, interstate immigration, foreign investment / weak dollar, baby boomer downsizing, etc.) bode well for demand keeping up with the supply.

Of course, I suppose I'd be retired in the south of France if predicting prices were easy and can see why others feel prices will drop further.  There certainly is no shortgage of lively discussion -- if you didn't see it, check out a recent SCR reader exchange here.   

-Wendy

Seattle Condo Market update

Spring is here so let's see how the numbers are looking.  For the month of March, inventory remains high in Seattle at 52.43% compared to same time last year.  Year-over-year pending sales dropped 27.76%. In fact, from January to March 08, we have seen a consistent drop in closed sales over the same time last year.  However, in March, median price for Seattle condos increased by 4.11%. 

Days on market remains longer than same time last year for all the neighborhoods.  Months of inventory in Belltown/downtown has recovered from early this year.  In January, Feburary and March, the months inventory has been shrinking from 14, to 8.3 to 7.6.  It looks like we are moving from a buyers' market gradually to a balanced market in Belltown/downtown.  Kudos to those buyers who picked up great deals in January.

Summary: More property is on the market and staying on the market longer than last year; however, sellers are not slashing prices nearly as much as some had expected.  Most homebuyers are taking a little bit longer to decide on their purchase knowing that there is not as much urgency.  Sellers on the other hand are still holding on to the prices they believe their condos ought to command and in some cases are making a symbolic reductions in the price but rarely more than 10%.  For the sellers who can wait, they are opting to rent out their condo to capitalize on the strong rental market.

Flashback: I was curious how many readers were right about their prediction on the market for March 08 compared to Fall 2007?  22% of SCR voters were right that the market will perform the same in March (~5% change in median price) compared to September 07 but sell at a slower rate.  About half of the poll takers incorrectly predicted in October that the pricing in the spring would drop by up to 30%.

-Wendy

Tower Spacing News

A lot has been discussed regarding the unpleasant tower spacing between Cosmopolitan and 1918 8th Ave. Kiro 7 News will be featuring an investigative report about problems with Seattle's urban density. This program may enlighten those who are thinking abour purchasing a highrise condo in the dense downtown area. The program is scheduled to air on Monday, March 3, at 6.00pm.

Read more on Cosmo Seattle and Seattle PI.

-Wendy

Western and Blanchard: Reader Survey Results

We had quite a handful of readers participating in the Western and Blanchard survey. Here are some highlights and key takeaways from the results. __________________________________________

Summary:

1. Close to 2/3 of the participants feel that there are too many planned amenities for this project. I wonder if they are more concerned about higher dues that are associated with more amenities or they simply do not need them.
2. Not surprisingly, 58% of the participants find that the location is a major selling point. It is really hard to argue about the location when it is only a couple of blocks from Pike Place Market.
3. 65% feel that a finger print scanner at the front entrance is a neat feature but not important to them.
4. 40% feel that the reputation of the developers is extremely important to them. With all the reports about leaky condos and delays in construction, I would have imagined more homebuyers would find that as a major consideration.
5. Out of the various green features (green roof, solar powered common are lighting, high efficient heating and recycled builidng materials), 64% picked high efficient heating.
6. Half of the participants are willing to pay $10,000 for air-conditioning in their unit.   

For full survey results, click here.

-Wendy

The White House and Your House

The mortgage and economy seem to be front and center for the Presidential candidates these days. Here are some tidbits I found from the frontrunners' websites regarding the mortgage situation and what they'd do about it.

__________________________________

Democrats:

• Barack Obama: Combat Mortgage Fraud and Subprime Loans; Create Fund to Help Homeowners Avoid Foreclosures; Create a Credit Card Rating System to Improve Disclosure; Establish a Credit Card Bill of Rights to Protect Consumers.  (If you're fired up for Obama, there's a unity march in downtown Seattle this Saturday.)
• Hillary Clinton: Foreclosure Moratorium; Freeze Interest Rates; Require Accountability.

Republicans:

• John McCain: Cut Taxes; Cut Spending.
• Mit Romney: Cut Taxes; Cut Spending; Government Guarantees For Larger Loans;  More Disclosure and Counseling for Consumers.

I'm curious what readers think about these candidates' plans? In my opinion, the government's job is to help consumers make decisions with as much info as possible but people who get irresponsible loans for flipping shouldn't really get bailed out.

-Wendy

Escala receiving 22 Real Estate Awards

Escala announced recently that they have been selected to receive 22 real estate awards on February 13 from the National Association of Home Builders. Here is a list of the awards. Read more here.

Top Honors

Attached Community of the Year (Urban)
Best Attached Home Plan – Condo or High-Rise Residence
Sales Team of the Year

Regional Awards

Best Graphic Continuity
Best Brochure for a Community Priced Over $1 Million
Best Direct Mail
Best Black & White Advertisement
Best Color Ad for a Single Project
Best Radio Commercial
Best Television Commercial
Best Overall Ad Campaign
Best Special Promotion
Best Signage
Best Interior Merchandising of a Model Priced Over $2 Million

Silver Awards

Best Graphic Continuity
Best Brochure for a Community Priced Over $1 Million
Best Color Ad for a Single Project
Best Overall Ad Campaign
Best Website for a Community
Best Signage
Best Attached Home Plan – Condo or High-Rise Residence

Individual & Council Awards

Marketing Director of the Year

The Vine and Fifteen Twenty-One were also the winner for "Attached Community of the Year" in 2003 and 2006 respectively.

-Wendy

Leaky Condos...nope, not Fake Stucco

Matt has a interesting post on an acid leak in the Trace Lofts garage (albeit, residents were warned the ongoing construction would require people to park at their own risk). Around the same time, a homebuyer commented that 5th and Madison had broken water pipes on the 2nd and 3rd floor. While helping a friend to move into his Mosler lofts home, one of my clients saw wood floors being ripped up in the townhome units and big drying blowers were brought in to dry off the floor. Apparently, there were some water issue in the units.

Having a few leaks isn't a huge deal, no new building is flawless which is why we have construction warranties and typically the first year of any new building includes a good amount of repair work.  The bigger question is to what extent are these the beginnings of a more issues for Trace, Mosler, or 5th/Madison?  We'll have to wait and see.  At the very least, it's probably another reason to consider the developers' warranties when comparing projects. 

-Wendy

Quick Review of the Seattle Condo Market in 2007

Five things we now know that we didn't know before the end of 2007.

1.)  The housing crash did not happen in Seattle despite constant media reports, bearish pundets, and market crises in most other regions of the US throughout 2006.

2.)  It is possible for one of the nation's top mortgage companies, American Home Mortgage, to stop funding approved loans leaving some homebuyers unpleasantly surprised at their closing appointments.

3.)  In Seattle, the biggest portion of new construction inventory, approximately 3500 units is proposed for 2010. However, these inventories may not all come through.

4.)  Homebuyers care deeply and intensely about how developers communicate with them on the delays for their condo and aren't afraid to blog, post, and comment about it. Some of those developers and marketers will probably get more skepticism on their future projects.

5.)  Most buyers went into wait and see mode in late 2007 and, for the most part, sellers didn't budge, took their properties off the market, or made symbolic price reductions.

Five things we suspected were true in 2007 but now we know for sure.

1.)  Seattle strong job growth is keeping the demand up.

2.)  Retiree (65 and above) and baby boomers formed the largest group of home buyers for new condo projects in downtown Seattle.

3.)  There is material demand for previously untested hotel/condo combo projects in the Seattle market.

4.)  Apartment-to-condo conversions decreased the supply of rentals and local job growth pushed up previously stable rental prices. 

5.)  The days of easy double digit appreciation and speculative flipping are over (at least for the next few years).

Five things we need to know as soon as possible if we want to know what is going to happen for Seattle condo market in the long term.

1.)  Will buyers re-enter the market in the first quarter of 2008 or will they continue to wait and see?

2.)  Will sellers continue their relative discipline and patience or will they start a price race to the bottom?

3.)  Will Seattle's employers maintain their growth or will they be affected by slower economic growth as seen in other regions in the country?

4.)  Will rental properties raise rents enough to make waiting less attractive than buying?

5.)  Will the sub-prime mortgage mess spread to the rest of the mortgage industry?

-Wendy

Condo Purchase Post Mortem Analysis

In a recent post, we looked at three projects completed last year and how closely the developers delivered on what they promised. Nothing beats hearing first-hand experience from homeowners who actually bought into these condos. I interviewed three buyers and summarized their responses below.

Two of these homeowners were represented by me and one is an SCR reader for whom I worked on a different subsequent property. If buying a pre-sale condo as your primary residence is one of your New Year's resolutions, you may want to get some insights from some folks who preceded you in the Seattle condo market.

Mosler Lofts

1.) What sold you on this condo?
    
Primarily the location but also the price per square foot and the particular unit available.

2.) How closely did the developer deliver (concept, compared to the rendering, architectural design, model unit versus your unit, overall finishes etc.)
         
Very accurate on the concept. Did not review a model unit but floor plan was pretty close to the actual.

3.) How was the overall buying process for you?
         
Unsatisfactory delays and poor communication by developer and developer's agent.

4.) Do you have any advice for first time new construction buyers?
          
Review the developer's track record and also the developer's agent. Negotiate upfront remedies for delays and/or be prepared for them.

Belltown Recovery?

It's still very early but I noticed there was a slight uptick in activity in the core Belltown resale market in December. 

In November, there were only two 2BR units in the $400-600K range in Belltown that went from Active to Contingent. In December, there were four units that went from Active to Contingent status (note: Decembers are historically a slower month than Novembers).

Perhaps this is an early indicator that some buyers, who seemed to be price inelastic over the last few months, are starting to pull the trigger once again. 

Stay tuned.

-Wendy

Sales Center Visit Experience

Most buyers focus on the location, building, amenities, and unit floorplans when considering a new condo purchase. What many have learned is that finding out the information you need can be made much easier (or more difficult) based on how well the sales center is organized and managed.

Did you feel wowed, pampered, and delighted by one particular sales center? Share your feedback and vote for your favorite sales center (even if you didn't end up buying, you're welcome to recognize a particularly satisfying visit).

-Wendy